Janeman Latul - State-owned PT Telekomunikasi Indonesia Tbk, or Telkom, plans to create a consortium with unnamed Iranian government-linked agencies to acquire a stake in state-owned Iran Telecom this year, a senior Telkom executive said on Friday.
“Three investors connected to the Iranian government have formed a consortium with us to buy stakes in Iran Telecom,” Tanri Abeng, Telkom’s chief commissioner, said on Friday.
Tanri said Telkom would provide capital for the transaction, but declined to reveal specific details.
“It is likely above $100 million,” he said. “I hope the initial agreement between the consortium members will be finalized at the World Islamic Economic Forum in Jakarta on March 2.”
In December, Denny Suryo, Telkom’s vice president of investor relations, said the company was seeking to buy a 20 percent stake in Iran Telecom.
“Telkom is looking for business partnerships in the Middle East because the regional economic outlook is promising, and telecommunications is one of the most attractive sectors,” he said.
Tanri said in November that Telkom, which is 51 percent owned by the Indonesian government, wants to become a global player through acquisitions. The company has already offered consulting services on telecommunications development in countries such as Ecuador.
Its plans to purchase a stake in Iran Telecom run counter to current investment trends, which have recently seen Middle Eastern investors buy assets in Indonesia.
Iran Telecom, which monopolizes Iran’s fixed-line market and is the country’s largest cellular operator, went public in August, selling 2.2 billion shares for
3.3 trillion Iranian rials ($330 million).
The plan to buy a stake in Iran Telecom emerged from a government-to-government initiative between Indonesia and Iran during a conference of Islamic countries in Dakar, Senegal, in March.
Executives from Telkom and Iran Telecom met there for the first time to discuss the possibility of a partnership.
Telkom’s plans to expand into the Middle East appear promising, analysts said, because Iran’s fixed-line and cellular subscriber base is growing at about 30 percent annually, in a country with a population of more than 65 million.
Iran currently has 23 million fixed-line subscribers, but that figure is likely to surpass 30 million by the end of the year, according to Iran Telecom.
Suryo said Telkom would mostly use internal funds to acquire the stake in Iran Telecom.
Iran Telecom manufactures more than 80 percent of its own equipment, including mobile phones.
Telkom is the biggest telecommunications firm traded on the Indonesia Stock Exchange, with assets valued at Rp 76 trillion ($6.9 billion).